Valmet Oyj's stock exchange release on October 24, 2017 at 12:00 noon EET
Figures in brackets, unless otherwise stated, refer to the comparison period, i.e. the same period of the previous year.
July-September 2017: Comparable EBITA margin increased to 7.9 percent
- Orders received decreased to EUR 743 million (EUR 788 million).
- Orders received increased in the Paper and Services business lines and decreased in the Pulp and Energy, and Automation business lines.
- Orders received increased in China and South America and decreased in North America, Asia-Pacific and EMEA (Europe, Middle East and Africa).
- Net sales increased to EUR 748 million (EUR 685 million).
- Net sales increased in the Paper, and Pulp and Energy business lines, remained at the previous year's level in the Services business line and decreased in the Automation business line.
- Comparable earnings before interest, taxes and amortization (Comparable EBITA) were EUR 59 million (EUR 52 million) and the corresponding Comparable EBITA margin was 7.9 percent (7.5%).
- Profitability improved due to higher net sales and lower selling, general and administrative expenses.
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- Earnings per share were EUR 0.20 (EUR 0.17).
- Items affecting comparability amounted to EUR -6 million (EUR -2 million).
- Cash flow provided by operating activities was EUR 78 million (EUR 122 million).
January-September 2017: Orders received increased 11 percent
- Orders received increased to EUR 2,544 million (EUR 2,282 million).
- Orders received increased in the Paper and Services business lines, remained at the previous year's level in the Automation business line and decreased in the Pulp and Energy business line.
- Orders received increased in China, Asia-Pacific and North America and decreased in South America and EMEA.
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- Net sales remained at the previous year's level at EUR 2,223 million (EUR 2,141 million).
- Net sales increased in the Paper business line and remained at the previous year's level in the other business lines.
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- Comparable earnings before interest, taxes and amortization (Comparable EBITA) were EUR 150 million (EUR 140 million), and the corresponding Comparable EBITA margin was 6.8 percent (6.5%).
- Profitability improved due to higher gross profit and lower selling, general and administrative expenses.
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- Earnings per share were EUR 0.54 (EUR 0.46).
- Items affecting comparability amounted to EUR -5 million (EUR -5 million).
- Cash flow provided by operating activities was EUR 203 million (EUR 158 million).
Valmet reiterates its guidance for 2017
Valmet reiterates its guidance presented on April 12, 2017, in which Valmet estimates that net sales in 2017 will increase in comparison with 2016 (EUR 2,926 million) and Comparable EBITA in 2017 will increase in comparison with 2016 (EUR 196 million).
Short-term outlook
General economic outlook
The global upswing in economic activity is strengthening, with global growth projected to rise to 3.6 percent in 2017 and 3.7 percent in 2018. Broad-based upward revisions in the euro area, Japan, emerging Asia, emerging Europe, and Russia more than offset downward revisions for the United States and the United Kingdom. While the baseline outlook is strengthening, growth remains weak in many countries, and inflation is below target in most advanced economies. And while short-term risks are broadly balanced, medium-term risks are still tilted to the downside. (International Monetary Fund, October 10, 2017)
Short-term market outlook
Valmet estimates that the short-term market outlook has decreased to a satisfactory level in energy (previously good level).
Valmet reiterates the good short-term market outlook for services, board and paper, and tissue, the satisfactory short-term market outlook for automation, and the weak short-term market outlook for pulp.
President and CEO Pasi Laine: Continued growth in the Paper business line and improvement in profitability
"The market activity has been high especially in the Paper business line, where orders received for the last 12 months exceed EUR 1 billion. Both Board and Paper, and Tissue have enjoyed exceptionally high levels of activity, and particularly China, followed by North America and EMEA, have been good markets for us. In addition to the Paper business line, we have been able to grow orders received in our stable business, meaning Services and Automation business lines. In January-September, Valmet's orders received have increased by 11 percent.
In the third quarter of 2017, Valmet's Comparable EBITA margin was 7.9 percent. This is the highest quarterly margin since becoming an independent company, and close to the lower end of our long-term margin target of 8-10 percent. However, the 6.8 percent margin for the first nine months of the year shows that there is still room for improvement.
Valmet was included in the Dow Jones Sustainability Index (DJSI) for the fourth consecutive year and reconfirmed as a constituent of the Ethibel Sustainability Index Excellence Europe. These achievements indicate Valmet's strong focus and consistent progress in sustainability. Inclusion in these indices is an acknowledgement to our 12,000 employees globally, as our world-leading sustainability performance is the result of their daily work. Sustainability is at the core of Valmet's business, and we will continue the systematic work through our sustainability agenda."
Key figures1
| EUR million | Q3/2017 | Q3/2016 | Change | Q1-Q3/ 2017 | Q1-Q3/ 2016 | Change |
| Orders received | 743 | 788 | -6% | 2,544 | 2,282 | 11% |
| Order backlog2 | 2,523 | 2,192 | 15% | 2,523 | 2,192 | 15% |
| Net sales | 748 | 685 | 9% | 2,223 | 2,141 | 4% |
| Comparable earnings before interest, taxes and amortization (Comparable EBITA) | 59 | 52 | 15% | 150 | 140 | 8% |
| % of net sales | 7.9% | 7.5% | 6.8% | 6.5% | ||
| Earnings before interest, taxes and amortization (EBITA) | 53 | 49 | 7% | 146 | 135 | 8% |
| % of net sales | 7.0% | 7.2% | 6.6% | 6.3% | ||
| Operating profit (EBIT) | 45 | 41 | 9% | 122 | 107 | 14% |
| % of net sales | 6.0% | 6.0% | 5.5% | 5.0% | ||
| Profit before taxes | 41 | 38 | 10% | 113 | 98 | 15% |
| Profit / loss | 30 | 26 | 15% | 81 | 69 | 19% |
| Earnings per share, EUR | 0.20 | 0.17 | 14% | 0.54 | 0.46 | 19% |
| Earnings per share, diluted, EUR | 0.20 | 0.17 | 14% | 0.54 | 0.46 | 19% |
| Equity per share, EUR | 5.95 | 5.68 | 5% | 5.95 | 5.68 | 5% |
| Cash flow provided by operating activities | 78 | 122 | -36% | 203 | 158 | 29% |
| Cash flow after investments | 62 | 108 | -42% | 157 | 116 | 36% |
| Return on equity (ROE) (annualized) | 12% | 11% | ||||
| Return on capital employed (ROCE) before taxes (annualized) | 14% | 12% |
1 The calculation of key figures is presented on page 39.
2 At the end of period.
| Equity to assets ratio and gearing | As at Sep 30, 2017 | As at Sep 30, 2016 | As at June 30, 2017 | |
| Equity to assets ratio at end of period | 38% | 38% | 38% | |
| Gearing at end of period | -3% | 15% | 4% |
| Orders received, EUR million | Q3/2017 | Q3/2016 | Change | Q1-Q3/ 2017 | Q1-Q3/ 2016 | Change |
| Services | 284 | 264 | 7% | 960 | 898 | 7% |
| Automation | 62 | 72 | -14% | 225 | 221 | 2% |
| Pulp and Energy | 122 | 275 | -56% | 527 | 692 | -24% |
| Paper | 275 | 176 | 56% | 832 | 472 | 76% |
| Total | 743 | 788 | -6% | 2,544 | 2,282 | 11% |
| Order backlog, EUR million | As at Sep 30, 2017 | As at Sep 30, 2016 | Change | As at June 30, 2017 |
| Total | 2,523 | 2,192 | 15% | 2,551 |
| Net sales, EUR million | Q3/2017 | Q3/2016 | Change | Q1-Q3/ 2017 | Q1-Q3/ 2016 | Change |
| Services | 284 | 286 | 0% | 838 | 846 | -1% |
| Automation | 60 | 65 | -7% | 192 | 196 | -2% |
| Pulp and Energy | 220 | 196 | 12% | 669 | 640 | 5% |
| Paper | 184 | 138 | 33% | 523 | 459 | 14% |
| Total | 748 | 685 | 9% | 2,223 | 2,141 | 4% |
News conference and webcast for analysts, investors and media
Valmet will arrange a news conference in English for analysts, investors, and media on Tuesday, October 24, 2017 at 2:00 p.m. Finnish time (EET). The news conference will be held at Valmet Head Office in Keilaniemi, Keilasatama 5, 02150 Espoo, Finland. The news conference can also be followed through a live webcast at www.valmet.com/webcasts.
It is also possible to take part in the news conference through a conference call. Conference call participants are requested to dial in at least five minutes prior to the start of the conference, at 1:55 p.m. (EET), at +44 1452 555566. The participants will be asked to provide the following conference ID: 97157167.
During the webcast and the conference call, all questions should be presented in English. After the webcast and the conference call, media has a possibility to interview the management in Finnish.
The event can also be followed on Twitter at www.twitter.com/valmetir.
Further information, please contact:
Calle Loikkanen, Director, Investor Relations, Valmet, tel. +358 10 672 0020
Kari Saarinen, CFO, Valmet, tel. +358 10 672 9603
VALMET
Kari Saarinen
CFO
Calle Loikkanen
Director, Investor Relations
Valmet is the leading global developer and supplier of process technologies, automation and services for the pulp, paper and energy industries. We aim to become the global champion in serving our customers.
Valmet's strong technology offering includes pulp mills, tissue, board and paper production lines, as well as power plants for bioenergy production. Our advanced services and automation solutions improve the reliability and performance of our customers' processes and enhance the effective utilization of raw materials and energy.
Valmet's net sales in 2016 were approximately EUR 2.9 billion. Our 12,000 professionals around the world work close to our customers and are committed to moving our customers' performance forward - every day. Valmet's head office is in Espoo, Finland and its shares are listed on the Nasdaq Helsinki.
Read more www.valmet.com, www.twitter.com/valmetglobal
Follow Valmet IR on Twitter www.twitter.com/valmetir
